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New York State Pension Fund Taps Fuller as CIO

New York has hired investment veteran Vicki Fuller as the chief investment officer overseeing the state's $150 billion pension fund, the state comptroller said.

BOSTON - New York has hired investment veteran Vicki Fuller as the chief investment officer overseeing the state's $150 billion pension fund, the state comptroller said on Friday.

Fuller, 55, moves to the pension fund from the private sector and arrives at a time when many of these funds are struggling to boost returns in the midst of volatile markets and forecasts by experts for lower returns.

Fuller, who earned an MBA from the University of Chicago, spent years at AllianceBernstein building and managing investment teams, New York Comptroller Thomas DiNapoli said in a statement.

From her position there, Fuller got a first hand look at how a number of other large public pensions were run when she developed investment strategies for the Florida State Board of Administration, the Maryland State Retirement and Pension System, the Illinois Teachers' Retirement System and the North Carolina State Treasury, which runs that state's pension plan.

Although she is a fixed income specialist, her experience with large pension funds has helped her understand all types of asset classes.

"I have to be able to speak to all of the asset classes. So I understand the process of investing and I understand asset allocation," she said in an interview.

Her first task when she begins her job next month will be "to figure out how to make a good pension better," Fuller said. "There is nothing broken here."

She will earn $300,000 a year, far less than many portfolio managers on Wall Street who oversee only a fraction of the money Fuller will be responsible for.

Many top pension fund managers have complained privately how difficult it is to attract top talent when salaries are relatively modest in the public sector compared with the private sector.

But Fuller downplayed industry talk that the best investors are automatically abandoning jobs in the public sector and heading to hedge funds where they can be their own bosses and earn hefty salaries if their bets pay off.

"I'm impressed with the high caliber of the staff here," she said about the state's investment staff.

Still it took New York nearly a year to fill the position and other states are also spending months searching for investment staff.

Massachusetts is looking for a chief investment officer to run its $50 billion fund after Stanley Mavromates moved to the private sector in June. The state is also looking to hire a specialist in hedge funds after it terminated most of its fund of funds managers to save costs.

Fuller's predecessor, Raudline Etienne, left the New York fund nearly a year ago for a position with former Secretary of State Madeleine Albright's global strategy company, Albright Stonebridge Group.

Moving to one of the biggest state pension funds in the United States will be a challenge for Fuller, especially when many pension funds are furiously trying to cut costs while seeking alternative investments to boost performance and smooth returns.

Earlier this month, New York posted relatively enviable returns for its last fiscal year, reporting a 6 percent increase thanks in part to the fact the year closed at the end of March, a few months earlier than other pension fund's fiscal years. It therefore missed some sharp market declines. The California Public Employees' Retirement System (Calpers) - America's largest public pension fund with $233 billion - returned only 1 percent on its investments in the year that ended on June 30.

New York State has invested with some of the industry's most prominent hedge funds, including John Paulson's Paulson & Co.

(Reporting By Svea Herbst-Bayliss and Gregory Roth; editing by Andre Grenon)

Copyright 2010 by Reuters. All rights reserved.

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